Jenkins' federal tax credit bill inspires equity debate

U.S. Rep. Lynn Jenkins experienced the rare privilege of being recognized nationally as the chief sponsor of legislation approved by the House overhauling the popular federal child tax credit.

The Kansas Republican delivered a series of speeches in Washington to articulate why Congress should sidestep accustomed gridlock and address the escalating cost of raising children.

Jenkins, who is seeking re-election, said approval of H.R. 4935, the Child Tax Credit Improvement Act of 2014, was necessary to help families "who are just trying to get by."

"The rising costs of everyday essentials such as gas, groceries and electricity all continue to rise while household incomes remain stagnant," she said. "When working families succeed, the nation's economy succeeds."

Historically, the federal child tax credit — enacted in 1997 — has worked to reduce the number of children living in poverty.

Provisions of the Jenkins-introduced bill did raise questions about extending availability of a tax credit to more higher-income families when Congress hadn’t acted on scheduled expiration of tax credits to the poor.

Chuck Marr, director of federal tax policy at the left-leaning Center on Budget and Policy Priorities in Washington, produced an analysis with colleagues that concluded action by the House would "make many relatively affluent families better off while letting millions of low-income working families become poorer."

Under the bill, married couples with two children making $150,000 would be eligible for a credit. Families could get a partial credit if not making more than $170,000. If made law, a Kansas married couple with two kids making $150,000 a year would receive an additional tax credit of $2,200 in 2018.

Jenkins' bill didn't include extension past 2017 of tax-credit provisions applicable to 5 million of the poorest low-income families and reduction of credit benefits to an additional 6 million families.

Assuming these economic-stimulus era policies adopted in 2009 to aid working-poor families aren't extended by Congress, a single mother in Kansas with two children who worked full time at minimum wage and made $14,500 annually would lose a tax credit of $1,725 in 2018.

Jenkins' bill would index the current maximum credit of $1,000 per child younger than 17 to the rate of inflation.

Marr argued that piece would most benefit people with incomes high enough to receive the greatest credit amount.

"The big winners would be the more-affluent families who would become newly eligible for the child tax credit," Marr said. "The losers would be millions of low-income families who are doing exactly what policymakers often say they want these people to do — working, even at low-wage jobs."

The House approved the measure 237-173 on July 25, with nearly all Republicans supporting the package and most Democrats opposed. Rep. Tim Huelskamp, R-Kan., and Jenkins voted for the bill. Kansas Reps. Mike Pompeo and Kevin Yoder, both Republicans, didn't cast a vote.

Prospects in the Democratic-controlled Senate appear dim, and the White House threatened a veto.

"The administration strongly supports tax relief for working and middle-class families," a White House statement said. "H.R. 4935, however, would raise taxes for millions of struggling working families while enacting expensive new tax cuts without offsetting their costs, reflecting fundamentally misplaced priorities."

Jenkins said the federal government should broaden eligibility for the tax credit, eliminate the marriage penalty in existing law and index the credit to go up as consumer prices rise.

She said the present configuration "punishes working parents by making it hard for them to keep up with the rising cost of raising a family."

"I applaud the House for passing sensible legislation to help families keep more of their hard-earned money," she said. "I urge the Senate to follow the House's lead by taking up this important bill that will have real results to improve the quality of life for working families."

Kansas families would appreciate an increase in the income eligibility amount for jointly filing married parents, she said. Her plan starts phasing out the credit for married joint filers when gross income reaches $150,000.

Under current law, the credit is phased out for single taxpayers with incomes of more than $75,000 and for married couples filing jointly at $110,000.

"This legislation," she said, "removes the marriage penalty embedded in the current tax credit and ensures those who choose to get married before they have kids do not have to pay more than those who do not."

Jenkins said inflation adjustments were important because the credit hadn't kept pace with costs since expanded to $1,000 in 2004 by President George W. Bush. "The lack of indexing of a particular provision to inflation means that a provision is worth a little less to taxpayers every year," Jenkins said.

Her bill touches upon the issue of illegal immigration by blocking people without a Social Security number from claiming a credit earmarked for low-income families.

Cost of implementing Jenkins' expansion of the tax credit was estimated at about $100 billion over a decade. The projected 10-year expense of making the current low-income benefit permanent was $72 billion.

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